Goldman Sachs is 'tactically bullish' on oil

"At the end of the day, we are probably going to get
about a million barrels a day of cuts from OPEC and
that's going to drive the market into deficit," Bart
Melek, the head of commodity strategy at TD Securities in
Toronto. ''We are seeing communications from Iraq
that they would be happy to participate," reports
The Business Times.

That only leaves Iran, which is still not on board with
the formula.

On the production front, Iran has reached 4 million barrels a
day. Previously, Iran had said it would come to the table
for talks only after reaching its pre-sanction level of production.

However, the new President-elect in the U.S. had promised
to “tear up” the nuclear agreement with Iran during his
campaign. And while the Iranians are not acknowledging the
threat to the deal, the uncertainty is palpable.

"There's just no way the Iranians are going to agree
to this," Again Capital's John Kilduff told CNBC. "I think they see a horizon,
potentially, where their oil production and exports get
disrupted again by the new Trump administration … so why
would they agree to any sort of cut at all right
now?"

“While there’s actually nothing new from Russia
today, Moscow is changing its rhetoric to show its
commitment to a deal,” said Alexander Kornilov, an
analyst at Aton LLC in Moscow. “The new wording shows
Russia is trying to convince OPEC partners,” reports
Bloomberg.

OPEC will announce a deal (or no deal) at the end of the
meeting on November 30, which should give a small pop to
oil prices if favorable. The markets, however, will be
keen to look at the numbers in the subsequent months to
analyze whether the OPEC members and Russia adhere to
their production quotas or whether there is blatant
cheating.

Though a pop above $52 a barrel in WTI is not
inconceivable, sustenance and a huge rally is unlikely,
regardless of a cut.